Beyond the Supermarket Shelves How Consumers Navigate the Grocery Shopping Experience Online and In-Store Contents

Beyond the Supermarket Shelves How consumers navigate the grocery shopping experience online and in-store Contents

Introduction The In-Store Grocery Shopper 3 How grocery shopping is evolving. 21 How consumers are navigating the grocery store aisles.

The Current State of Grocery Shopping Six Steps to Success 4 Where consumers are shopping for groceries today. 30 How grocery retailers can better connect with today’s shoppers across channels.

The Online Grocery Shopper About PowerReviews 8 Why consumers are shopping online for groceries. 33 About the study and PowerReviews.

Once upon a time, when a family ran out of milk, bread and altogether. Clearly, there continues to be tremendous value eggs, the parents had no choice but to load up the kids and in brick and mortar grocery retail—largely because grocery drive to the local grocery store to restock. Today, however, shopping is a highly sensory experience. consumers have a growing number of online grocery shopping options, including meal boxes such as Blue Apron, online In the midst of the growing number of shopping options, services such as Instacart and Shipt, and more traditional how are today’s consumers navigating the grocery shopping grocers adopting “click and collect” options—which allow experience both online and in-store? And what information consumers to order online and pick up in-store. And that’s are they seeking out to help them make better purchase just to name a few. With the news of Amazon acquiring decisions? Whole Foods for $13.7 billion—as well as the ecommerce giant entering the meal kit space—the trend of shopping In 2017, PowerReviews conducted a survey to explore online for groceries will only accelerate. In fact, an analyst at the grocery shopping habits of American consumers. The Cowen predicts that online grocery sales will increase from following report explores the results of this research and $71 billion this year to $177 billion in 2022. provides recommendations for retailers to better attract, convert and retain grocery shoppers across channels, in an But in-store grocery shopping certainly isn’t dead. The increasingly competitive space. majority of grocery purchases continue to occur within the four walls of a store. And the consumers who have adopted online grocery shopping haven’t abandoned the supermarket

©PowerReviews. All Rights Reserved 2017 Beyond the Supermarket Shelves | 4 Most Consumers Still Shop In-Store Brick and Mortar Still Rules Ecommerce continues to be a major driver of retail growth. But Where consumers are shopping for groceries although more and more consumers crave the convenience *respondents could select all that apply of shopping online, a majority still opt to visit a brick and mortar store to purchase their groceries. 17% Of the consumers we surveyed, 17% have purchased groceries Online online in the last 90 days. In comparison, 90% have purchased groceries in a physical store during the same time period. 90% In-Store

©PowerReviews. All Rights Reserved 2017 Beyond the Supermarket Shelves | 5 Online Shoppers Aren’t Abandoning City Dwellers are More Likely Brick and Mortar Stores to Shop Online for Groceries Though a growing number of consumers are making grocery As expected, consumers residing in larger cities are purchases online, that’s not to say these savvy shoppers are significantly more likely than their rural counterparts to abandoning the supermarket altogether. In fact, 92% of purchase groceries online. This is due, in large part, to the online grocery shoppers have also made an in-store grocery availability of various online shopping options in densely purchase in the last 90 days. This points to the growing populated areas. importance of building an omnichannel grocery strategy that effectively engages shoppers wherever they’re shopping. Nearly a quarter (23%) of consumers living in a city with a population of 500,000 or more have made an online grocery purchase in the last 90 days, compared to 10% of consumers who reside in a town with a population of less than 50,000.

©PowerReviews. All Rights Reserved 2017 Beyond the Supermarket Shelves | 8 A Growing Trend Shoppers Use a Variety of Online Today, less than a quarter (17%) of consumers are purchasing Grocery Services groceries online. But that number will only continue to grow Depending on geographic area, there are a variety of online as online shopping options increase throughout the country grocery shopping options available to consumers. Our —and more and more consumers crave the convenience they research found that online-only services (such as Peapod, have come to expect from online shopping. AmazonFresh or Jet.com) are the most popular option, with 39% of online grocery shoppers indicating they’ve used this Why are these early adopters opting to shop online? And type of service in the last 90 days. Following closely behind what information are they using to make purchase decisions? is ordering directly from a local grocery store for pickup or

©PowerReviews. All Rights Reserved 2017 Beyond the Supermarket Shelves | 9 delivery (commonly referred to as click and collect), with who purchases groceries from a local grocery store, then 38% of online grocery shoppers using this service. delivers them to the consumer’s home. This is likely because these services are often only available in densely populated Meal boxes—such as HelloFresh and Blue Apron—are another metropolitan areas. It’s worth noting, however, that many popular option, with 34% of online grocery shoppers using online grocery services have started expanding into smaller these services in the past 90 days. Surprisingly, only 17% of markets. online grocery shoppers have used a third party service —such as Instacart—that pairs consumers with a personal shopper

40 39% 35 38% 34% 30

Percentage 15 17%

Online-only Ordering directly Meal boxes Third party services from a local delivery services grocery store ©PowerReviews. All Rights Reserved 2017 2016 Beyond Mapping the Supermarketthe Path to Purchase Shelves || 1111 Consumers Shop Online to Save Time and Access Information Consumers lead busy lives and are always on the lookout for online and 27% like that they can easily access information ways to maximize their time. So, as anticipated, saving time about products, including reviews. is the most popular reason consumers purchase groceries online, with 72% indicating it’s a key reason they choose to Other top reasons for shopping for groceries online include do so. avoiding impulse purchases that often happen in-store (30%) and avoiding the hassle of getting to a grocery store (23%). Shoppers also appreciate the access to information that online grocery shopping provides. 36% indicate that online shopping makes it easier to compare products and prices

©PowerReviews. All Rights Reserved 2017 Beyond the Supermarket Shelves | 12 Shoppers Purchase a Variety of Grocery Items Online Grocery shopping is a sensory experience—much more so body wash) and 45% purchase home care items (such as than other product categories. Consumers who shop in a detergent and cleaners). store have the opportunity to touch, smell and even taste items to assess their quality and freshness. It’s much more But, as the survey results reveal, online grocery shoppers difficult to judge the quality of fresh food items—such as aren’t completely steering clear of fresh food purchases meat and produce—when shopping online. online. Nearly half (47%) of them shop online for fresh food, such as meat, produce and dairy. So it comes as no surprise that shelf-stable goods are the most popular grocery items to purchase online. 58% of Other popular grocery items shoppers are purchasing online online grocery shoppers purchase non-perishable packaged include frozen foods (32%), soft drinks (33%) and alcoholic foods (such as cereal, canned soups and snack foods), 49% beverages (12%). purchase personal care items (such as soap, shampoo and

©PowerReviews. All Rights Reserved 2017 Beyond the Supermarket Shelves | 13 Fresh, Frozen and Everything In Between Shoppers are purchasing various grocery items online *Respondents could select all that apply

Non-perishable packaged foods 58% Personal care items 49% Fresh food, such as meat, produce and dairy 47% Home care items 45% Soft drinks 33% Frozen foods 32% Alcoholic beverages 12%

10 20 30 40 50 60 70 Percentage Online Shoppers Read Reviews Reviews Influence Online Grocery Shoppers Ratings and reviews have become a key part of the path to Previous research with Northwestern University found purchase, regardless of the product a consumer is shopping that reviews are especially impactful for new or unknown for. And, as our data indicates, online grocery is no exception. brands and products. It makes sense, then, that 72% of online grocery shoppers indicate that they are more likely to

If reviews are available on an online grocery service’s website, purchase a grocery item they’ve never purchased before if there are customer reviews for that product. 93% of shoppers will read them at least occasionally. And most online grocery shoppers are turning to reviews much Online grocery shoppers are turning to reviews—and this more often. 19% of online grocery shoppers always read content is influencing their purchase. This points to the reviews for grocery items, and an additional 34% read them importance of having plenty of reviews available for grocery regularly. products, especially those that are new to market.

©PowerReviews. All Rights Reserved 2017 Beyond the Supermarket Shelves | 15 72% of online grocery shoppers are more likely to purchase a grocery item they’ve never purchased before if there are reviews for that product.

©PowerReviews. All Rights Reserved 2017 Beyond the Supermarket Shelves | 16 Shoppers Want Reviews For Our research indicates that the top categories online Myriad Grocery Products shoppers want to access product reviews for are personal Clearly, consumers are turning to reviews when they’re care items (68%), home care items (54%), non-perishable shopping online for groceries. But do they crave reviews for packaged foods (39%) and fresh food, such as meat, produce specific types of products more than others? and dairy (31%). Other top categories include frozen foods (27%), soft drinks (23%) and alcoholic beverages (21%).

Personal care items 68% Home care items 54% Non-perishable packaged foods 39% Fresh food, such as meat, produce and dairy 31% Frozen foods 27% Soft drinks 23% Alcoholic beverages 21%

10 20 30 40 50 60 70 ©PowerReviews. All Rights Reserved Percentage 2017 Beyond the Supermarket Shelves | 18 Online Shoppers Want Reviews Directly on the Ecommerce Website or App Online grocery shoppers want to find reviews—and they It’s key for grocery retailers to provide all of the information don’t want to look hard to find them. More than half (53%) shoppers are looking for in one place. Retailers that don’t of online shoppers prefer to find this content directly on prominently feature product reviews directly on their website the website or app they’re using to purchase their groceries. or mobile app risk losing shoppers to Amazon or another An additional 38% want to find grocery product ratings and service that does. reviews on Amazon, and the remaining 9% prefer to find this content on a third party review site.

Where do you Directly on the website or want to see review app I purchase from (53%) content? Amazon (38%)

Third party review sites (9%)

©PowerReviews. All Rights Reserved 2017 Beyond the Supermarket Shelves | 21 The Value of Brick and Mortar Phones Aid In-Store Shopping Today, the majority of consumers are still visiting a brick and We know from previous research that 90% of shoppers are mortar store to purchase groceries—at least part of the time. using their phones to help make purchases while in-store. Our survey found that 90% of consumers have made an in- And though this number likely fluctuates depending on store grocery purchase within the last three months. the product category, our most recent research found that the majority of grocery shoppers (59%) are also turning to Even shoppers who opt to purchase groceries online are their phones while shopping in store, with the most popular also visiting physical store locations. 92% of online grocery activities being to find or redeem coupons (32%) and to shoppers have also made an in-store grocery purchase within review shopping lists (30%). the last three months. What types of information do in-store grocery shoppers use—and want to use—as they navigate Grocery shoppers are also using their phones in-store to the store aisles? find product information prior to purchase, including recipes (20%), ratings and reviews (17%) and competitor prices (16%).

©PowerReviews. All Rights Reserved 2017 Beyond the Supermarket Shelves | 22 Mobile Phones as a Key Shopping Tool How shoppers are using their phones in the grocery store *Respondents could select all that apply

Find or redeem coupons

32%

Review shopping lists

30%

Browse recipes

20%

Read product ratings and reviews

17%

Search for competitor prices

16%

5 10 20 25 30 35 40 Percentage In-Store Shoppers Want Reviews In-Store Shoppers are for New Products Swayed By Reviews A consumer may not ordinarily seek out reviews for a grocery We know that 72% of online grocery shoppers are more item that she purchases each week—such as cereal. But likely to purchase a grocery item they’ve never purchased if she’s considering a cereal she’s never purchased before, before if there are customer reviews for that product. And there’s a certain amount of risk involved. Reviews can help our research found that reviews also have the power to sway mitigate this risk. in-store shoppers: more than half (52%) of in-store shoppers are more likely to purchase a grocery item they’ve never It makes sense, then, that the majority (68%) of in-store purchased before if there are reviews for that product. grocery shoppers are at least somewhat interested in accessing product ratings and reviews while shopping for new products in a grocery store.

How interested Very interested (15%) are you in seeing reviews in-store? Interested (21%)

Somewhat interested (32%)

Not interested (32%)

©PowerReviews. All Rights Reserved 2017 Beyond the Supermarket Shelves | 25 52% of in-store shoppers are more likely to purchase a grocery item they’ve never purchased before if there are reviews for that product.

©PowerReviews. All Rights Reserved 2017 Beyond the Supermarket Shelves | 26 Shoppers Seek Store Displays Shopper marketing professionals, take note: now’s the time with Review Content to start providing your shoppers with review content in- Our survey found that while in-store grocery shoppers are store. Featuring this content in your stores can be as simple using their phones for various shopping related tasks, 41% as displaying star ratings and customer reviews on cardboard admit they don’t use their phone to help them shop. It makes signs alongside your products, similar to what Amazon does sense, then, that more than half (56%) of in-store grocery in their bookstore locations. Start displaying this content in shoppers prefer to find reviews on store signage. your stores now, before your competition does.

©PowerReviews. All Rights Reserved 2017 Beyond the Supermarket Shelves | 27 In-Store Shoppers Also Seek Reviews Online As mentioned previously, a majority of grocery shoppers Be sure you’re appealing to your mobile-savvy, in-store are using their phones as a grocery shopping tool. So, shoppers by ensuring you have plenty of reviews on your understandably, in addition to the 56% of shoppers who want website and mobile app, too. As an added bonus, this content to find reviews on store signage, 25% prefer to find reviews helps ensure your product pages are showing up in search on the store’s mobile app, and the remaining 19% want to engine results, too. find reviews using the store’s website via a mobile phone.

In-store signage (56%)

How do you want Using the store’s app via to view reviews mobile phone (25%) while in-store? Using the store’s website via mobile phone (19%)

©PowerReviews. All Rights Reserved 2017 Beyond the Supermarket Shelves | 29 Six Recommendations for Grocery Retailers The way consumers shop for groceries is evolving—and will continue to do so as more online grocery shopping options emerge. Read on for six recommendations for grocery retailers to meet the needs of today’s consumers in order to compete—and win—in an increasingly competitive space.

Feature Ratings and Reviews on In-Store Displays Grocery shoppers want access to reviews in-store—and they don’t want to look hard to find them. In fact, more than half 1 of in-store grocery shoppers prefer to find ratings and reviews on store signage. And the goods news is, featuring ratings and reviews in your stores doesn’t have to be a big investment. Simply feature star ratings and customer reviews on signs alongside your products—similar to what Amazon does in their bookstores.

Include Ratings and Reviews on Your Website and Mobile Apps In addition to craving ratings and reviews on store signage, both online and in-store grocery shoppers want to find this 2 content on retail websites and mobile apps. So be sure you have plenty of reviews for plenty of your products—consumers are looking for this content for a wide range of grocery products.

©PowerReviews. All Rights Reserved 2017 Beyond the Supermarket Shelves | 30 Leverage Product Sampling to Generate Reviews Product sampling is certainly not a new concept for grocery brands and retailers. But in addition to being a tactic to get 3 shoppers to try—then buy—your products, sampling campaigns are also an effective way to generate ratings and reviews for your products. Work with your ratings and reviews provider to send samples of new products or products in need of additional review coverage, then request reviews from those who received a free sample. More than half (52%) of in-store shoppers and nearly a quarter (72%) of online shoppers are more likely to purchase a grocery item they’ve never purchased before if they can find review content for those products.

Create Memorable Experiences 4 If you have brick and mortar grocery stores, think of ways you can leverage this asset to create memorable experiences for your shoppers that go beyond a transaction. For example, offer cooking classes that’ll entertain and inspire consumers. Offering rich experiences for your in-store shoppers will allow you to forge deep connections with them. And chances are, those who visit your store for these experiences will stay to pick up some groceries, too.

©PowerReviews. All Rights Reserved 2017 Beyond the Supermarket Shelves | 31 Leverage Brick and Mortar Stores to Drive Online Success Look for opportunities to leverage your brick and mortar stores as a tool to help drive your online success. One way grocery 5 retailers are doing this is by offering click and collect services, which allow consumers to place an order online and pick it up in a store. For example, 55% of all digital sales for Target are fulfilled in-store. Offering this service not only saves your customers time, it also has the potential to drive additional in-store sales.

Bolster Your Online Presence 6 A growing number of consumers are shopping for groceries online. And even those who are visiting brick-and-mortar grocery stores are using their phone as a shopping tool. That’s why it’s important to have a strong online presence so consumers can find your product pages—and easily convert on them. Make sure your website provides a great user experience for your shoppers and includes plenty of information about your products and stores. Go beyond your own product descriptions to prominently feature product ratings and reviews on your website and mobile apps. In addition to providing your shoppers with the information they’re looking for, featuring user-generated content on your website can also ensure your product pages are showing up in search engine results.

©PowerReviews. All Rights Reserved 2017 Beyond the Supermarket Shelves | 32 About the Research This report is based on a survey and subsequent analysis of 1,046 American consumers from July 2017, developed with the goal of better understanding how consumers are navigating the grocery shopping experience both online and in-store.

About PowerReviews PowerReviews works with more than 1,000 global brands and retailers to deliver cloud-based software that collects and displays ratings and reviews and questions and answers on websites. Ratings and reviews solutions from PowerReviews are essential for consumers as they search and shop online and in-store, and they are proven to increase online site-wide sales.

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